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Although business leaders have given the decision to scrap the national insurance increases on employers, announced yesterday by the Con-Lib coalition, there will be charges made on some employees.
"Small businesses did not want this tax on jobs because clearly it would have been a major barrier to staff retention and job creation and would have hindered economic recovery," said Forum of Private Business chief executive Phil Orford.
The BBC also revealed the results of a survey of leading economists had all bar a handful agreeing with the prediction that VAT will increase from the current 17.5% to 20% by next year.
The increase in VAT would raise £11.5bn a year but would reverse sharply the drop to 15% that was made last year to help consumer spending in the recession.
The Governor of the Bank of England Mervyn King gave his official backing for £6bn cuts yesterday saying it would be a positive indication to the markets that action was being taken to reduce the public debt, which was the most pressing issue facing the country.